03: Assignment - Financial Statements, Cash Flow, and Taxes Net sales Less: Operating costs, except depreciation and amortization Less Depreciation and amortization expenses Operating income (or EBIT) Less: Interest expense Pre-tax income (or EBT) Less: Taxes (40%) Earnings after taxes Less: Preferred stock dividends Earnings available to common shareholders Less: Common stock dividends Contribution to retained earnings $15,000,000 11,250,000 600,000 $3,150,000 315.000 2,835,000 1,134,000 $1,701.000 300,000 1.401,000 765.450 5635,550 $12.110.440 9,082,830 600,000 $2.427,610 364.142 2,063,468 825,837 $1238,081 300.000 938 081 Given the results of the previous income statement calculations, complete the following statements: $846,544 Year 1 to In Year 2, 1 Cold Goose has 25,000 shares of preferred stock issued and outstaning, then each preferred share should expect to receive In anul vidends 1 Cold Goose has 200,000 shares of common stockissed and outstanding, then the firm's earnings per share (EPS) is expected to change from in Year 2 . Cold Goose's earnings before interest, taxes, deprecation and amortization (EBITDA value changed from In Year 1 to in Year 2 to say that Cold Goose's netiniows and out flows of cash at the end of Years 1 and 2 are equal to the company's annual contribution to retained earnings, $635 550 and $846,544, respectively. This is because of the items reported in the income statement involve payments and receipts of cash 90 888 s A % 5 To & 7 * 00 8 9 0 R T Il + T Y U O Assignment - Financial Statements, Cash Flow, and Taxes Q Search this cour 1. Cold Goose is able to achieve this level of increased sales, but its interest costs increase from 10% to 15% of earnings before interest and taxes (EBIT) 2. The company's operating costs (excluding depreciation and amortization) remain at 75% of net sales, and its depreciation and amortization expenses remain constant from year to year. 3. The company's tax rate remains constant at 40% of its pre-tax income or earnings before taxes (EBT). 4. In Year 2, Cold Goose expects to pay $300,000 and $938,081 of preferred and common stock dividends, respectively. Complete the Year 2 income statement data for Cold Goose, then answer the questions that follow. Be sure to round each dollar value to the nearest whole dollar tas Les Operating cos, except depreciacon and amortization Let: Derection and amortization expenses Operating income (or EDIT) Les rest expense encome (OET) Less (40) Camisetas Les ved stock dividends Cold Goose Metal Works Inc. Income Statement for Year Ending December 31 Year 1 515,000,000 11,250,000 500.000 53.150.000 315,000 2,815,000 1.134.000 51.701,000 300,000 .. Year 2 (Forecasted) $12,110,440 0.052.330 600,000 $2,427.610 364.142 2,062468 125.837 51.238,081 300.000 go 838 re $ A 4 118)
